Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (1) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (1) TMI 1766 - ITAT CHANDIGARHAssessment u/s 153A - addition of sundry creditors - HELD THAT:- We find that issue is covered in favour of the assessee by order of ITAT Chandigarh Bench in the group cases of the assessee namely M/s Heera Moti Agro Industries etc. [2016 (9) TMI 1318 - ITAT CHANDIGARH] in which the orders of authorities below were set aside and matter was restored to the file of Assessing Officer with direction to re-decide this issue by following the reasons for decision given by ld. CIT(Appeals) for assessment year 2003-04 whereby addition on identical issue have been deleted. The orders of authorities below are set aside and issue is remanded to A.O. The A.O. is, therefore, directed to follow order of the Tribunal in the case of M/s Heera Moti Agro Industries (supra) who shall re-decide this issue accordingly as is directed in this case. These grounds of appeal of the assessee are accordingly, allowed for statistical purposes. Addition u/s 69A - Bogus purchases - unrecorded purchases on the basis of document No. 26 of Annexure A-23 of Delta 7 - HELD THAT:- As addition under section 69A could be made of unexplained income which is not recorded in the books of account and source of the same have not been explained. The facts noted above clearly show it was a credit purchase which according to submission of the assessee was rejected because it was of poor quality. Any how, when credit purchase is entered into books of account of M/s Heera Moti Spices Product and no payment have made by assessee and no further inquiry have been conducted from this party whether any payment have been made by assessee, the transaction remained of credit purchase which is also clear from the ledger account of the seller party as well as entry in the books of account of the assessee. In the absence of any payment proved by the Assessing Officer, it cannot be considered to be a case of unexplained money generated by the assessee. The assessee further explained before the ld. CIT(Appeals) that during the search, trading account was drawn up and closing stock was worked out in which no discrepancy was found by the search party as well and no adverse inference was drawn. These submissions of the assessee have no been rebutted by the authorities below therefore, no addition under section 69A could be made. Addition based on seized documents - unexplained cash receipts - HELD THAT:- The document recovered during the course of search in the instant case was a dumb document. Thus, Tribunal rightly deleted the addition made by the Assessing Officer on account of undisclosed income on the basis of seized material.” The same facts are noted by Assessing Officer in the assessment order as per seized document. Therefore, in the absence of any evidence on record as to how Assessing Officer concluded that these figures are in lacs, it appears that the seized paper is dumb document, therefore, no addition should be made of this nature against the assessee. We, therefore, following decision of the Delhi High Court in the case of Girish Chaudhry [2007 (5) TMI 176 - DELHI HIGH COURT] and in the facts and circumstances of the case, set aside the orders of authorities below and delete the entire addition. GP estimation - non rejection of books of accounts - addition by applying higher GP of 2.5% - HELD THAT:- Each year is separate year and merely because assessee agreed for addition in assessment year 2003-04, is no basis to make the addition against the assessee by enhancing the GP in subsequent years. Since books of account of the assessee have not been rejected, therefore, trading results cannot be disturbed by enhancing the GP. Further, the Assessing Officer compared GP of assessee from assessment year 2003-04, Assessing Officer ignored the fact that in preceding assessment year 2007-08, GP ratio of the assessee was 16.58% and in assessment year 2008-09, GP is 15.74% and there is no peak difference between the GP. Further, in preceding assessment year 2007-08, NP rate declared by the assessee was 1.36% and NP rate in assessment year under appeal 2008-09 is 2.36% which is higher as compared to the earlier year. Therefore, on these basis itself, addition is wholly unjustified. The ld. CIT(Appeals) in his findings admitted that assessee is in the business of manufacturing and trading of Masalas so maintenance of quantity details may not be feasible. Therefore, there was justification for not providing quantitative details/stsock. The submissions of the assessee have not been rebutted through any evidence on record. The assessee also submitted before ld. CIT(Appeals) that search party had taken out inventory of the stock which was compared with the trading account drawn as on the date of search but no discrepancy had been found. Thee submissions of the assessee have also not been rebutted by the authorities below. Therefore, considering the above discussion and the totality of facts and circumstances, we are of the view addition is unjustified by enhancing GP rate by 2.5%. The orders of authorities below are, accordingly, set aside the addition is deleted on account of applying enhanced GP of 2.5%. This ground of appeal of the assessee is allowed. GP Addition - seized papers contain the details of “amount jama” and “amount naam” - HELD THAT:- As against first seized paper, amount of ₹ 5 lacs have been shown as ‘Jama’ and against ‘naam’ payable amount of ₹ 20,12,955/- has been shown. The interest is also noted in the second seized paper. As against amount ‘jama’ in second paper, amount of ₹ 10 lacs have been shown and the amount of ₹ 19,31,819/- have been shown as amount ‘naam’ i.e. ‘payable’ and interest. Since no amount is paid by the assessee, therefore, payable amount could not be added against the assessee. Further, there is no evidence found of any interest paid by the assessee. Therefore, these additions would be wholly unjustified. However, the amount of ₹ 5 lacs and ₹ 10 lacs have been shown as amount ‘jama’ in both seized paper meaning thereby assessee paid this amount to the concern partly who have prepared the seized paper. Since assessee failed to explain the seized paper which were found from the possession during the course of search, therefore, ‘jama’ amount shall have to be considered as amount paid by the assessee to a third party. Therefore, addition to the extent of ₹ 15 lacs (5+10) shall have to be maintained. The assessee also failed to explain as to how GP rate should be applied on these transactions. As against the amount noted against ‘naam’ i.e. payable and interest, no evidence was found against the assessee that these amounts have been paid by the assessee. Further, the payable itself shows that no amount have been paid by the assessee against the narration ‘naam’. Addition cannot be made.
|